Executive Summary: Key Legal and Evidentiary Issues

• Conflict arose over unpaid debt under a $100,000 line of credit and a $10,000 credit card backed by personal guarantees.

• Defendants alleged an oral agreement with an RBC manager to make “interest-only” payments and later, full forbearance due to COVID-19.

• RBC denied any such verbal agreement existed and relied on the written terms requiring changes to be in writing.

• The counterclaim, based on a 2018 mortgage payout dispute, was struck as statute-barred under the Limitations Act.

• Court found no factual or legal link between the 2018 mortgage events and the 2020 credit facility default.

• Summary judgment was granted in RBC’s favour due to long-standing defaults and insufficient evidence from the Simmers.

Background and parties involved
The Royal Bank of Canada (RBC) sued Simmer Project Solutions Inc., along with Todd and Rayanne Simmer (collectively, the “Simmers”), for outstanding debt under two credit facilities: a $100,000 revolving demand loan and a $10,000 Visa credit card. These were secured by a general floating charge over the corporate assets and personal guarantees from both Mr. and Mrs. Simmer. RBC issued a formal demand for full payment on October 7, 2020, alleging multiple defaults including non-compliance with financial covenants and failure to pay amounts due.

Defendants’ response and counterclaim
The Simmers did not make payment. They asserted that their RBC branch manager had agreed orally to an “interest-only” payment arrangement and, later in March 2020, told them to stop payments entirely as informal pandemic relief. They claimed willingness to repay the debt but had not made any payments for over five years. In their defence, the Simmers also counterclaimed, alleging that RBC’s conduct in early 2018—specifically, an alleged improper demand for repayment of a $370,000 business mortgage—caused the financial hardship leading to the defaults. RBC moved to strike the counterclaim as being filed outside the two-year limitation period.

Policy terms and legal framework
The loan agreements required any amendments or indulgences to be documented in writing. Despite this, the Applications Judge initially declined to grant summary judgment, citing conflicting evidence about whether a forbearance had been granted. She relied on Jack Ganz Consulting Ltd v Recipe Unlimited Corporation, 2021 ONCA 907, to support the position that the existence of any waiver or indulgence could not be resolved summarily. However, she struck the counterclaim under Rule 3.68(2)(b) of the Alberta Rules of Court as being clearly outside the two-year limitation period. She rejected the Simmers’ discoverability argument, finding that any injury from the 2018 mortgage payout was known or ought to have been known by early 2018.

Appeal and summary judgment
On appeal, Justice Devlin conducted a de novo review. He upheld the dismissal of the counterclaim, reaffirming that the Simmers had knowledge of the injury in 2018 and that no connection existed between that event and the 2020 loan default. He also found that section 6(2) of the Limitations Act, which can allow late claims closely related to timely proceedings, did not apply. The 2018 and 2020 events were factually and transactionally unrelated.

The Court granted RBC’s appeal for summary judgment. Even if the Simmers’ assertion of an “interest-only” arrangement were accepted, they had defaulted repeatedly—including no payments after November 2019—long before the COVID-19 pandemic. The claim that the branch manager told them to stop paying in March 2020 was unsupported, undocumented, and categorically denied by the manager. The Court found the timing implausible and the explanation more likely an after-the-fact justification for failing to make the February 2020 payment.

Justice Devlin concluded that the Simmers were in chronic default and that there was no genuine issue requiring a trial. He emphasized that unsupported, self-serving evidence was insufficient to resist summary judgment, especially where the financial record was overwhelmingly against the defendants. The case was resolved in favour of RBC, with the parties directed to address the amount owing and costs separately.

The Court did not make a final order on the monetary award or costs in this decision.